What happens if I default on a private student loan?

Answer:

Private lenders may attempt to collect on your debt directly, or they may hire collection agencies to try to collect on your debt.

In addition, they may take you to court. Lenders can also report your default to the credit reporting agencies, which could harm your credit.

Tip:

If you are worried you wont be able to pay your private student loan, you should contact your lender as soon as possible. You may be able to negotiate with your lender to set up a repayment plan or otherwise settle your debt.

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